Since AD LDS uses the password policies from the local system or the domain, there is no way to set a specific password policy for the AD LDS instance.
But there is a way to disable the policy so you could handle the password policy in your own code.
The following command disables the policy
Note! My instance of AD LDS is running on "localhost:389". Change it to the server and port that you use.
This nice article explains it in more detail
The following command disables the policy
dsmgmt "Configurable Settings" Connections "connect to server localhost:389" q "Set ADAMDisablePasswordPolicies to 1" "Commit changes" q q
Note! My instance of AD LDS is running on "localhost:389". Change it to the server and port that you use.
This nice article explains it in more detail