Rule 4 Competitive Balance Draft Picks
Beginning in 2012, six "Competitive Balance" Rule 4 Draft picks will be awarded by lottery between the 1st and 2nd round, and six more will be awarded by lottery between the 2nd and 3rd round. The lottery will take place on the Monday following the Rule 4 Draft signing deadline. Only MLB clubs that receive revenue sharing and clubs from the ten smallest markets will be eligible to participate in the lottery for Competitive Balance picks.
Once awarded, these draft picks can be traded, but only during the MLB regular season, and the pick cannot be traded for cash unless it is a financial adjustment made to offset the salary of one or more of the players involved in the trade. Also, a Competitive Balance draft pick can be traded only once (only by the club that was awarded the pick). Once traded, the pick cannot be "flipped" to a third club.
If a player selected with a Competitive Balance Draft pick does not sign, the club receives a compensation selection in the next Rule 4 Draft, one slot lower between the 1st or 2nd round than where the club selected the previous season. There is no further compensation if a player selected with a Competitive Balance compensation draft pick does not sign.