...
> So we still are in search for an answer to the original
> question (and I have added one more):
> 1) How can we set up SYSSTART (or a system startup routine)
> without needing embedded passwords.

FWIW, the HPSTREAMEDBY variables distinguishes between the
initial operator.sys logon vs. a subsequent logon as
operator.sys.  E.g.
  HPSTREAMEDBY = MANAGER.SYS (SYSTEM PROCESS) <-- initial logon
vs.
  HPSTREAMEDBY = OPERATOR.SYS (#S9)           <-- new logon
A logon UDC may be able to take advantage of this difference.

> 2) How do we control FTP logon security?

We have anon. FTP on Jazz and I removed SF capability from
the USER.FTPGUEST user to ensure that no one could write to
Jazz via FTP.  All other FTP connections to Jazz require user
and account passwords.

regards,
 Jeff Vance, CSY