It’s almost 5 years since the UEFA came up with the “home-grown player” concept. The reasoning behind the proposal is more or less the same as the ones FIFA use for their 6+5. A homegrown, player is, according to the UEFA, someone that has been registered with the club (club-trained) or has been with an club from the same association (association-trained) for at least 3 seasons between the age of 15 and 21. Thereby UEFA wants to give incentive to clubs to nurture young talent (and buying players within a country) and thereby increase the local identity of teams also on the highest level.
At a first glance this looks like it would give teams like West Ham, with a strong youth policy, an advantage but the UEFA proposal, at least the current version only, stipulates that 3 club-trained and 2 association-trained players to be in the 25 man squad submitted to UEFA at the start of the season to be used in UEFA club competitions. So 20 players with no home-grown talent what so ever will be eligible for the UEFA games. It doesn’t seem like much of an incentive to me.
Still last year Rafa Benitez famously blamed the UEFA rule for forcing him to leave Sami Hyypia out of his Champions League squad. With only Steven Gerrard and Jamie Carragher as first team members from their own Academy Rafa was forced to add Jay Spearing and Stephen Darby to their 'A' squad.
In contrast to the FIFA 6+5 rule the EU reckons that the “home-grown player” concept “seems to comply with the principle of free movement of workers while promoting the training of young European players”, so there might be less legal problems with this.