Hi there,
In order to use fine-grained passwords, your domain needs to be Windows Server 2008 Domain Functional Level or higher. This essentially means that all Domain Controllers in your domain need to be Windows Server 2008 or higher and the domain functional level raised to at least Windows Server 2008. Additional password policies are applied to users or groups, not OU’s.
Each PSO object has a setting called Password Settings Precedence. This value determines which PSO will be used when multiple PSO objects are being applied. The PSO with the lowest value will be used with the lowest value being 1. If there are multiple PSOs with the same Password Settings Precedence value then the PSO with the lowest GUID will be used. Every object in Active Directory has a unique GUID that acts as a serial number for the object, thus one PSO will always have a lower GUID.
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