NEW YORK (CNNMoney) -- As hot tech companies line up to test the IPO market, trading in restricted, private markets softened last quarter.
SecondMarket said Tuesday that investors spent $115.4 million buying shares of private companies through its exchange in the first quarter -- down significantly from the record $158 million investors spent in the fourth quarter.
SecondMarket spokeswoman Aishwarya Iyer says the biggest reason for the decline was a change in the company's trading rules. Previously, SecondMarket would complete deals when the company whose shares were being traded "was silent or ambivalent about the market." Now it refuses to complete a transaction without the company's "specific guidance or express approval."
That change makes SecondMarket almost completely company-controlled -- which the exchange has said is its goal.
SecondMarket and its rivals connect those who own stock in privately held companies with buyers willing to make speculative investments in those companies. Because the investments are extremely risky -- privately held companies aren't required to disclose their financial statements and key information -- only "accredited" investors with a net worth of at least $1 million are eligible to participate.
The SEC is eying this growing shadow market but hasn't yet stepped in with tighter regulations. The exchanges themselves are trying to fend off the regulatory watchdogs through aggressive self-policing.
SecondMarket is also encouraging the companies whose shares it trades to embrace the concept. That sparked its recent move toward giving companies greater control over its transactions.
And SecondMarket also handed companies some control over how much it discloses about them. Starting with its first-quarter report, SecondMarket is no longer revealing the details on which companies dominate its trading.
For example, in the fourth quarter, Facebook trades accounted for 39% of all SecondMarket transactions. SecondMarket didn't reveal similar statistics for its first quarter.
Iyer says some of the companies being traded asked SecondMarket "not to reveal names publicly, so going forward, we decided to not include that."
As SecondMarket's reporting changes, so too does the market itself. With the tech IPO market essentially frozen, SecondMarket and rival exchange SharesPost burst onto the scene in 2009 to help employees and early investors cash out.
But now, the tech IPO market is starting to thaw. Demand Media (DMD) made its public debut in January, LinkedIn is slated to price its offering this week and hot names like Groupon are rumored to be working toward going public.
A hotter IPO market could crater the demand for private stock deals on SecondMarket and its rivals.
Highest in demand: Even though SecondMarket is no longer dishing the dirt on the deals it has actually completed, it's still reporting each quarter on the companies its buyers are most eager to grab. In the first quarter, that top-10 list was, in order: Facebook, Twitter, Groupon, LinkedIn, Zynga, Foursquare, Skype, Pandora, Yelp and Gilt Groupe.
But high buy-side interest doesn't necessarily translate into actual trading. Sometimes there are no sellers. And nearly all private companies retain the "right of first refusal" over deals and can opt to instead to buy the shares back themselves.
SharesPost founder Greg Brogger has estimated that 90% of the transactions initiated on his platform are subject to first-refusal rights -- and he says they're often invoked. 
