Suggested reading: z/OS Communications Server, IP Configuration Guide,
Version 1 Release 4, Document Number SC31-8775-02. Of course, use the
manual appropriate to your os level. 

Hint: IBM calls it TLS (transport layer security) which is claimed to be
a superset of SSL. 

Depending on how you set up your certificate based environment, you may
already be encrypting the data flow. I would suggest turning on some
debugging security traces. (See below).  Note: you may have to recycle
the FTP server to pick up the changes. 

Upon connection, the FTP client and server negotiate the highest level
of encryption that both can support using the keys in the respective
certs. Assuming some level of encryption is agreed upon, then nothing
further flows in the open.    

I believe that all of the messages will appear on the client side, not
the server side. Here are extracts from my notes on my testing:  

Add to server SYS1.TCPPARMS(FTPSDATA)

DEBUG SEC                                                
 ACCESSERRORMSGS              ; Send detailed login failure replies   
 KEYRING MYRING1             ; Cert keyring                          
 EXTENSIONS AUTH_TLS          ; Activate SSL support       

Add to client //SYSFTPD DD DISP=SHR,DSN=MYHLQ.JOB.CNTL(FTPSSL1)


  DEBUG SOC(2)                                          
  CLIENTERRCODES TRUE                                   
  KEYRING MYkeyring1                                          
  SECURE_DATACONN PRIVATE                               
  SECURE_MECHANISM  TLS                                   

Invoke FTP:

//S001      EXEC PGM=FTP,PARM='-v -d -e -r TLS'                         


 
 
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