Zend Server on Iseries Apache httpd.config

Question

I am evaluating Zend server on the Iseries. I am currently using Zend Core. I am unable to restrict accesses to directories in the htdocs folder. With Core I was able to restric accesses with the following:

<LocationMatch /DirectoryName>
 Require valid-user
 AuthType Basic
 AuthName SecureArea
 PasswdFile %%SYSTEM%%
 UserID %%CLIENT%%
</LocationMatch>

This would give give the user the standard username/pword question box.

When I use the same settings and sign in with any user that does not have QSECOFR privileges I get 401 error: Authorization Required Unauthorized - authentication failed. Which is not the desired effect.

Any help on this would be greatly appreciated.