TROUBLESHOOTING: oracle.security.jps.JpsRuntimeException: Cannot read from policy store.

If during development you get

<12 Apr 2011 10:49:36 μμ EEST>

          \logs\DefaultServer.log is opened. All server side log events will be written to this file.>
 

oracle.security.jps.JpsRuntimeException: Cannot read from policy store.
            at oracle.security.jps.internal.policystore.xml.XmlPolicyStore.buildFromFile(XmlPolicyStore.java:425)
            at oracle.security.jps.internal.policystore.xml.XmlPolicyStore.(XmlPolicyStore.java:224)
        ...
Caused by: oracle.security.jps.JpsRuntimeException: javax.xml.stream.XMLStreamException: End Document reached 

                                    prematurely.
            at oracle.security.jps.internal.core.datastore.xml.XmlDataStoreParser.getDataStoreEntryStax

                 (XmlDataStoreParser.java:166)
        ...
            ... 28 more
...
weblogic.security.SecurityInitializationException: The loading of OPSS java security policy provider failed due to 

               exception, see the exception stack trace or the server log file for root cause. If still see no obvious cause, enable the 

                debug flag -Djava.security.debug=jpspolicy to get more information. Error message: 

                oracle.security.jps.JpsException: [PolicyUtil] Exception while getting default policy Provider
          at weblogic.security.service.CommonSecurityServiceManagerDelegateImpl.loadOPSSPolicy

                                    (CommonSecurityServiceManagerDelegateImpl.java:1398)
        ...
Caused By: oracle.security.jps.JpsRuntimeException: oracle.security.jps.JpsException: [PolicyUtil] Exception while getting 

                default policy Provider
           at oracle.security.jps.internal.policystore.PolicyDelegationController.(PolicyDelegationController.java:291)
...       
Caused By: java.security.PrivilegedActionException: oracle.security.jps.JpsException: [PolicyUtil] Unable to obtain default 

               JPS Context!
            at java.security.AccessController.doPrivileged(Native Method)
...
Caused By: oracle.security.jps.JpsRuntimeException: Cannot read from policy store.
            at oracle.security.jps.internal.policystore.xml.XmlPolicyStore.buildFromFile(XmlPolicyStore.java:425)
...

Solution
Try to remove jazn-data.xml and system-jazn-data.xml from the DefaultDomain.
For example under my DefaultDomain I have all these:

Although jazn-data is part of your application, it is copied to the domain because there is where the security is stored.

Note: I have changed my default path of JDeveloper's system folder. The default is C:\Documents and Settings\username\Application Data\JDeveloper\system11.1.1.4.37.59.23