This designation comes from the Official Professional Baseball Rules Book, issued by Major League Baseball. That is not to be confused with the Official Baseball Rules, which dictate the manner in which an actual game is conducted.

The Official Professional Baseball Rules Book has 60 main rules that cover the acquisition and disbursement of players, the standards required between teams and players, the relationship with minor league teams, etc.

Rule 1 is Circuits, outlining the number of clubs, territorial rights and more. Rule 2 is Player Limits and Reserve Lists. Rule 3 is Eligibility to Sign Contracts. And then come the rules covering drafts:

Rule 4 is the First-Year Player Draft, the massive selection of eligible amateurs that takes place in June.

Rule 5 is the Annual Selection of Players, meaning the draft that takes place every December for players with certain years of experience who have not been given a spot on a roster where it’s presumed they could have advanced.

In the Major League phase of the Rule 5 draft, if a player of either four or five years experience (depending on age when signed) is not placed on the 40-player big-league roster, he is eligible to be drafted from the team that had held his rights.