Retention - You can retain up to 8 locals and up to 2 overseas players from your respective real life team (refer to the third post to see who that includes). The less players you retain the earlier you will come into each draft (one for locals and one for overseas players).
Squad - Your initial squad will consist of 12 locals and 3 overseas players. There will be no trades, however throughout the season you will be able to sign up to 2 more locals and 1 more overseas player if you think you are struggling in certain departments.
You can only have at most one local who has recently retired/now just plays T20s (marked by a * on the player list). The overseas players marked with a * are now T20 specialists in real life, and while there is no limit on how many of them you can have in your squad they will be rated accordingly.
It will be up to you to scout the overseas players, and hence you have to decide whether you think you can do better in the draft compared to retaining the ones from your respective real life team. To be eligible the overseas players from Aus, Eng, Ind, Pak, SA, SL, and WI cannot have played Test cricket in 2013, but you can pick anyone from any other country, and they must still play some form of competitive cricket.
If you have any questions feel free to ask, otherwise once you have confirmed your team name and coach here PM me the list of players that you are retaining.