§1. The Roman Pontiff freely selects men to be promoted as cardinals, who have been ordained at least into the order of the presbyterate and are especially outstanding in doctrine, morals, piety, and prudence in action; those who are not yet bishops must receive episcopal consecration.
§2. Cardinals are created by a decree of the Roman Pontiff which is made public in the presence of the college of cardinals. From the moment of the announcement they are bound by the duties and possess the rights defined by law.
§3. When the Roman Pontiff has announced the selection of a person to the dignity of cardinal but reserves the name of the person in pectore, the one promoted is not bound in the meantime by any of the duties of cardinals nor does he possess any of their rights. After the Roman Pontiff has made his name public, however, he is bound by the same duties and possesses the same rights; he possesses the right of precedence, though, from the day of reservation in pectore.
Source: Code of Canon Law (Vatican.va)