Storage groups can only be assigned through the storage group ACS routine. For a given data set, the storage group ACS routine runs only if the storage class ACS routine assigns a valid storage class. If the storage class is not valid, allocation fails. If no storage class is assigned, then the data set is not system-managed and is allocated according to the rules in a non-system-managed environment.
You can assign candidate storage groups to a data set allocation from which SMS selects eligible DASD volumes for the data sets. If the storage group ACS routine does not determine a storage group for a data set, allocation fails.