The PASSWORDACCESS option in your dsm.sys file is not set to GENERATE. Reset it to GENERATE and restart the HSM client.
The PASSWORDACCESS option in your dsm.sys file is set to PROMPT. It must be set to GENERATE in order for automatic space management services to work.
TSM terminates the client.
The root user must set the PASSWORDACCESS option to GENERATE in the dsm.sys file.