Rule 5 Draft Restrictions

1. A club must have as many slots open on its MLB Reserve List (40-man roster) prior to the Rule 5 Draft as the number of players it selects in the Major League Phase, and an MLB club's AAA and AA affiliates must have as many slots open on their respective reserve lists prior to the Rule 5 Draft as the number of players selected in the AAA and AA phases of the draft. There is no limit on the number of Rule 5 eligible players any one organization can lose.

2. A player selected in the Major League Phase of the Rule 5 Draft must be placed on the drafting club's MLB Reserve List (40-man roster) immediately, and must be tendered a major league contract by 5 PM (Eastern) on the day of the draft.

3. A player selected in the Major League Phase of the Rule 5 Draft can be traded at any time, but the player cannot be released or sent to the minors any earlier than 20 days prior to MLB Opening Day, and then only if Outright Assignment Waivers have been secured and the player's former club declines to re-claim the player. 

4. If a player selected in the Major League Phase of the Rule 5 Draft remains on an MLB Active List and/or MLB Disabled List(s) for the entire MLB regular season following selection and spends at least 90 days on an MLB Active List (25-man roster), Rule 5 restrictions are removed at the conclusion of the season. (If time spent on an MLB Active List is less than 90 days in the season following selection, the player remains a Rule 5 player into the next season, and the player continues to be a Rule 5 player until he has spent 90 days total on an MLB Active List).

5. If a club decides not to keep a player selected in the Major League Phase of the Rule 5 draft on its MLB 25-man Active List (and/or MLB DL), the player must be placed on Outright Assignment Waivers, where any of the other 29 MLB clubs can claim the player for the $25,000 Rule 5 waiver price and assume the Rule 5 obligations.

6. If the Rule 5 player is not claimed off Outright Waivers, the player then must be offered back to the minor league club from which he was drafted, and the player's former club can reclaim the player for $25,000, with the player being automatically outrighted to the Reserve List of the minor league club from which he was drafted. The club from which the player was drafted usually has 72 hours to decide whether to reclaim the player, but it has only 24 hours to decide if the player is eligible to be an Article XX-D Free-Agent if outrighted to the minors (player has at least three years of MLB Service Time and/or player has been outrighted previously in his career).

7. If a Rule 5 player is returned (outrighted) to the minor league club from which he was drafted, the drafting club is responsible for any portion of the player's salary above what the player was paid the previous season.

8. If a Rule 5 Player is returned (outrighted) to the minor league club from which he was drafted, and if the player has at least three years of MLB Service Time and/or has been outrighted previously in his career, the player can elect to be an MLB Article XX-D minor league free-agent after being outrighted (he has three days to decide), or he can accept the Outright Assignment and defer the right to be a minor league free-agent until after the conclusion of the MLB regular season. (The player is not eligible to be an Article XX-D minor league free-agent after the conclusion of the MLB regular season if he accepts the Outright Assignment and is subsequently added back to an MLB Reserve List prior to the conclusion of the MLB regular season).

9. If the minor league club from which the player was drafted declines to reclaim the player, the Rule 5 restrictions are removed, the drafting club retains the player, and the player can be sent to the minors or released.

10. A player selected in the AAA or AA Phase of the Rule 5 Draft must be assigned to the Reserve List of the AAA or AA club that drafted the player, but the player can be assigned to the Active List of any minor league affiliate in the MLB club's organization once the minor league regular season commences. Also, unlike players selected in the Major League Phase of the Rule 5 Draft, a player selected in the AAA or AA Phase of the Rule 5 Draft does not have to be offered back to the club from which he was drafted if the player is ultimately assigned to the Active List of a minor league affiliate below the level of the minor league affiliate that drafted the player.

11. A club can select a player off the reserve list of one of its own minor league affiliates, but if the player is selected in the Major League Phase, the club is bound by the same Rule 5 roster restrictions as if it had selected the player off the reserve list of another club's minor league affiliate. 

12. A player eligible for selection in the Rule 5 Draft cannot be "covered up" from selection, either by agreement between two clubs or by effect. If the MLB Commissioner believes a club "covered up" a player to avoid losing the player in the Rule Draft, the offending club or clubs are subject to a fine.