It has warned that it may not pay commission to share shops - firms that have agreed to accept registrations from individuals - if they promote selling services.
Stags have made quick money in previous privatisations by selling their shares within days of the start of trading. Partly as result, the number of shareholders has typically halved within three months.
The use of penalties for share shops that advertise their selling services reflects the Government's continuing interest in encouraging long-term holders. Most share shops will still sell shares for their clients if requested to do so. Ian Ward, chief general manager at Norwich & Peterborough, which owns the stockbroker Waters Lunniss, said it was not allowed to say anything specific about selling arrangements. But it would be happy to take instructions to sell BT3 shares as soon as dealing begins. It will also take instructions to sell at a minimum price.
Advisers to the Government argue that profits from stagging have fallen in recent years. Whereas anyone who bought shares when BT was first floated in 1984 was able to bank a 53 per cent profit after three months, anyone who bought in the second tranche, at the end of 1991, did not gain anything in the same period, based on the fully paid price.
Initial privatisations have continued to give to rise to substantial short- term profits - 37 per cent for the regional electricity companies, 27 per cent for PowerGen and 20 per cent for Thames Water.
But the scope for huge gains in BT3 - over and above the discount offered to private investors - is limited by the fact that BT's shares are already traded on the stock market and investors have already made up their minds about its value.
Anyone selling BT shares immediately after trading starts would miss out on the dividend. A payout of 9.45p a share is due in September to anyone still on the register on 1 September. A further payment is due in February at about the same time as the second instalment.
Eric Hathorne of Henderson Crosthwaite said investors should apply for shares in BT3 because of the yield. 'We don't think it should be stagged. I don't think it's going to any substantial premium.'
Oftel, the industry watchdog, is poised to announce a new interconnection agreement between BT and its main rival, Mercury, which is expected to grant Mercury better prices for using BT's network to complete its customers' calls, writes Mary Fagan. Mercury believes that the new agreement - which will be dated back to last autumn - will also involve back-payments from BT of up to pounds 50m.
Separately last week, Oftel said that telephone numbers should be portable between services offered by BT and its rivals. Cable companies and Mercury have lobbied fiercely for this change and believe it will substantially boost their penetration.