this is very easy to understand it basically says that Nicolas Anelka can play in the Champions League despite the fact he has played in the UEFA Cup. "UEFA Champions league sides can add up to 3 new players to their Champions League squads during the January transfer window" but you are limited to one player that has played in europe to play in the Champions League. For example if Chelsea signed kaka/ronaldinho they would have to pick either kaka/ronaldinho/anelka to play.