If you come across this issue when you try to connect a JMS client to IBM MQ (v7.0.x.x), this has nothing to do with any environment variables or VM arguments, at least it wasn’t for me (There are quite a lot of those articles out there, that makes you think this is the problem).
The fix for this will has to be done on the server side. Open the MQ Explorer. Now, if you have not done so already, you need to add your JNDI directory to JMS Administered Objects. In the Connection Factories, you will note that your factories’ transport type is actually “Binding”. You need to right-click and go to the switch transport option which will have the “MQ Client” option that needs to be selected. Now the transport type will be “Client”. Do this to all Connection Factories that you are connecting to. Now, your configuration will look something like below:
Now, run your client again, and the error should go away. HTH.