A clearing member is a registered member of any of the stock exchanges that have direct connectivity with the depositories holds a clearing member account or pool account. A Pool account is used by the members/brokers to hold securities received from clients and deliver them to clearing corporations. This account is also used to receive securities from the Clearing Corporations and distribute onwards to clients.
This is different from a beneficiary owner account (BO), that you open with a DP. In a BO account, you can only hold those shares and securities that are purchased in your name. You can hold shares on behalf of others. The Clearing Member (CM) account is normally opened by a broker when they have to handle securities on your behalf. For example, if you buy shares, then the broker will first receive the shares into their own CM account and subsequently, the share will be transferred into your demat account. Similarly, when you sell shares, the shares are first debited from your DP account and credited into your Broker pool account (CM account). The broker will then give delivery from the CM account to the clearing corporation on your behalf. Only registered brokers who are authorized to clear transactions on behalf of clients are allowed to open clearing member (CM) accounts with the depository. Investors can only open BO accounts.