The number of people who held individual savings accounts, or ISAs, through brokerage houses in South Korea has soared as the government changed the rule allowing holders to invest in equities from this year, data showed Wednesday.

Nearly 1.29 million people held ISAs at local securities firms as of the end of July, up 1.13 million from the end of last year, according to data compiled by the Korea Financial Investment Association.

But while the number of ISA holders grew at brokerages, the number of subscribers to bank’s ISAs declined 810,000 to 970,065 over the cited period. It was the first time the number of brokerage ISA holders exceeded subscriptions at banks since the tax-efficient scheme was introduced in March 2016.

The Korean scheme benchmarked the UK’s popular tax-free savings plans --also known as ISAs -- that was launched as part of government efforts to help individuals increase their wealth with a one-stop scheme. The financial product also gives tax benefits if individuals hold accounts for at least three years.

ISAs hold diverse financial products, including cash deposits, funds and equity-linked securities. Customers can choose specific investment products themselves or leave the responsibility of managing their assets to financial firms.

Industry watchers attributed the surging number of brokerage ISA holders to the recent rule change. Individuals who hope to run their financial products by investing in stocks may have transferred their ISAs from lenders to securities firms, they said.

Among ISA holders’ asset portfolios, the combined value of equity assets stood at 794.4 billion won ($681.9 million) as of the end of July, up from 3.2 billion won five months prior. The value rapidly increased over the past several months, chalking up 106.2 billion won and 268.7 billion won as the end of March and April, respectively.

As a result, stocks accounted for 8.7 percent of total assets held in ISAs as of end-July, up from 0.04 percent as of end-February. Investing in stocks was the second-most used way of managing assets among the ISA holders, which came after cash deposits. The portion of deposits at banks fell from 73.3 percent to 63.8 percent, during the same period.

Industry insiders forecast that money movements from banks to brokerages are likely to continue for a while since wider tax benefits on stock investments are expected to be given to ISA holders. The government earlier hinted at tax exemptions on profits earned through investing in local stocks and funds from 2023.