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"Competitive Balance" Rule 4 Draft picks are slotted between the 1st and 2nd rounds (Competitive Balance Round "A") and between the 2nd and 3rd rounds (Competitive Balance Round "B").
Beginning with the 2017 Rule 4 Draft, Competitive Balance draft picks will no longer be awarded by lottery. Rather, all clubs who qualify (the ten smallest market clubs and the ten lowest revenue clubs, some of which are the same club) will receive Competitive Balance draft picks in either Competitive Balance Round "A" (between the 1st & 2nd rounds) or in Competitive Balance Round "B" (between the 2nd & 3rd rounds), with each club alternating between the two rounds every-other year.
Beginning with the 2018 Rule 4 Draft, Competitive Balance draft picks will no longer be subject to forfeiture by clubs signing a Qualified Player.
A Competitive Balance draft slot can be traded only during a period of time starting on December 2nd and extending up until two hours prior to the MLB First-Year Player Draft (MLB Rule 4 Draft). The slot 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 slot can be traded only once (only by the club that was awarded the pick). Once traded, the slot cannot be "flipped" to a third club.
NOTE: 2020 and 2021 Rule 4 Competitive Balance draft picks cannot be traded beginning on March 28, 2020, and extending through the conclusion of the 2021 draft.
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 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.