The scale reduction factor is one of the means of defining a secant projection. For example, the scale reduction factor used in UTM coordinate systems indicates that the projection surface is shrunk to the degree necessary to produce a grid scale factor of 0.9996 at the central meridian which would otherwise have a grid scale factor of unity (1.0). A factor of 0.9996 indicates a secant projection whereas a scale factor of 1.0 would indicate a tangential projection.
See the definition of scale reduction factor at http://www.onwordpress.delmar.cengage.com/resources/inside_GeoMedia/Module3c.aspx (browsed Jan 2009). Use MgCoordinateSystemProjectionInformation method IsUsingScaleReduction to determine whether a coordinate system has a scale reduction factor the GetScaleReduction method on the MgCoordinateSystem instance to get the scale reduction value.
The presence of the two projection parameters, Northern Standard Parallel and Southern Standard Parallel, indicates a secant projection. Projections in the Alber, Lm2sp, Lmblg, Lmbrtaf, Mndotl, and Wccsl projection groups have these parameters.