FULL PRODUCT VERSION :
java version "1.8.0_111"
Java(TM) SE Runtime Environment (build 1.8.0_111-b14)
Java HotSpot(TM) 64-Bit Server VM (build 25.111-b14, mixed mode)

ADDITIONAL OS VERSION INFORMATION :
Microsoft Windows [Version 6.1.7601]

A DESCRIPTION OF THE PROBLEM :
Unable to launch the application if the proxy.pac file is configured. Tested this issue in some version. Details below

JDK 8u60 - FAIL
JDK8u111 - FAIL
JDK8u51 - PASS


REGRESSION. Last worked in version 8u122

STEPS TO FOLLOW TO REPRODUCE THE PROBLEM :
1. Go to Configure Java > Network Settings > select "Use automatic proxy Configuration script" and provide proxy.pac file
2. Try to launch the application.

EXPECTED VERSUS ACTUAL BEHAVIOR :
EXPECTED -
Application should launch
ACTUAL -
Failed to launch the application

ERROR MESSAGES/STACK TRACES THAT OCCUR :
Caused by: java.security.AccessControlException: access denied ("java.io.FilePermission" "C:\Program Files (x86)\Java\jre1.8.0_111\lib\ext\nashorn.jar" "read")

at java.security.AccessControlContext.checkPermission(Unknown Source)

at java.security.AccessController.checkPermission(Unknown Source)

at java.lang.SecurityManager.checkPermission(Unknown Source)

at com.sun.deploy.security.SelectableSecurityManager.checkPermission(Unknown Source)

at java.lang.SecurityManager.checkRead(Unknown Source)

at java.io.File.isDirectory(Unknown Source)

at sun.net.www.ParseUtil.fileToEncodedURL(Unknown Source)

at sun.security.provider.PolicyFile.canonicalizeCodebase(Unknown Source)

at sun.security.provider.PolicyFile.access$700(Unknown Source)

at sun.security.provider.PolicyFile$5.run(Unknown Source)

at sun.security.provider.PolicyFile$5.run(Unknown Source)

at java.security.AccessController.doPrivileged(Native Method)

at sun.security.provider.PolicyFile.getPermissions(Unknown Source)

at sun.security.provider.PolicyFile.getPermissions(Unknown Source)

at sun.security.provider.PolicyFile.implies(Unknown Source)

at java.security.ProtectionDomain.implies(Unknown Source)

at java.security.ProtectionDomain.impliesCreateAccessControlContext(Unknown Source)

at java.security.AccessController.doPrivileged(Native Method)

at jdk.nashorn.internal.runtime.options.Options.getBooleanProperty(Options.java:154)

at jdk.nashorn.internal.runtime.options.Options.getBooleanProperty(Options.java:179)

at jdk.nashorn.internal.parser.Lexer.(Lexer.java:67)

... 63 more

REPRODUCIBILITY :
This bug can be reproduced always.

CUSTOMER SUBMITTED WORKAROUND :
Have to downgrade to the JDK 8u51 version.