I found this on IBMLINK, it implies that the TSO userid region size limits may override your REGION= for batch TSO

*Item BDC000012845*


                
Source..........: PDDB0 PDDB0 Last updated....: 19990623
Abstract........: SMS RETCODE: 16 when using Storage Group Application

USERS: SMS

PROBLEM SUMMARY:
DGTUC051 RC16 RSN0, ABEND878, trying to add volumes to a storage group.

SOLUTION:
Increased Maxsize and Size values in the RACF TSO segment for TSO userid


--
Bruce Black
Senior Software Developer
Innovation Data Processing

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