The retirement earlier this month of Commissioner Irving Pollack, a veteran of 34 years with the Securities and Exchange Commission, leaves the Carter administration free to make one of its most significant appointments.

Pollack, an expert on securities laws and a strong voice for investor protection, will not be easily replaced. Indeed, there are many at the commission -- especially in the enforcement division -- who would have wished that the 62-year-old Pollack be appointed for another five-year term.

Chairman William Proxmire (D-Wisc.) of the Senate Banking Committee which will consider the SEC nomination, has sent a letter to the White House urging President Carter to nominate a Pollack-like replacement.

There are reports that the administration wants to put a woman on the five-member commission, and one candidate reportedly is Bonnie Cohen, treasurer of the United Mine Workers of America Health and Welfare Fund. She is not a lawyer, but her husband, Louis, is a partner in the firm of Wilmer and Pickering, and a confidant of a former senior partner in the firm, Lloyd Cutler, now counsel to President Carter.

All the White House personnel office would say late last week was that several candidates were under consideration.

The reason for all the concern is that the commission has taken on a decidedly conservative tilt, which critics claim is translated into policies that are proinvestment industry and antienforcement.

Like other divisions, enforcement has to go to the commission for permission to undertake major projects, such as investigations. Since Pollack was the first director of the division when it was formed in 1972, he was understandably supportive of enforcement projects proposed by his successor, Stanley Sporkin.

Pollack was almost invariably joined in voting for tough industry regulations and for broad enforcement division investigative powers by 48-year-old John R. Evans. Evans was finally reappointed for another five-year term last year after many months of temporizing by the White House and strong opposition from Wall Street forces. But Evans is an economist, not a lawyer as are the other commissioners, and SEC officials note that he relied heavily on Pollack for guidance on legal questions.

A recent commission newcomer is Stephen J. Friedman, 43, whose experience as a securities lawyer in New York suggests to some that he may bring a pro-industry view to the job. Indeed, SEC attorneys who have presented arguments before Friedman say that he is disarmingly civil.

Another commissioner member, 65-year-old Philip A. Loomis Jr., often swings both ways in his voting, but typically will settle for the conservative side. Finally, SEC Chairman Harold M. Williams, 52, is the pilot who was named by Carter some three years ago. Williams, the former dean of U.C.L.A. graduate school of business and one-time chairman of Norton Simon Inc., has promised to serve the full five-year term at the SEC post.

Is is precisely this commitment that makes Pollack's departure extremely troubling to those who disagree with Williams. For them, the feisty Pollack was the intellectual equal to the soft-spoken, yet iron-willed chairman. Much of the criticism of Williams comes from those who think he's undermining the once-powerful enforcement division. Not long ago, that division enjoyed almost daily headlines as literally hundreds of U.S. companies admitted to paying bribes to officials at home and abroad. Suddenly, thanks to the exploits of the enforcement division, the SEC's fame spread far beyond its normal confines of Wall Street and executive suites.

But that period, which was unique in the SEC's nearly 50-year history, has passed, and the enforcement division is now returning to its more prosaic investigations.

Some critics, mostly outside the commission, unfairly blame Williams for the apparent sharp fall-off in enforcement cases since those exciting payments days. But inside the commission, the criticism centers on more subtle changes he has allegedly directed. This opinion says that he has overreacted to criticism by industry and others of the enforcement division by building up other divisions to the detriment of the enforcers.

"I don't question his good faith," says one former SEC attorney about Williams. "It's legitimate for an agency head to want to restore balance between divisions. But he's gone farther than he planned. Now it's the enforcement division that's not equal to other divisions."

Williams himself admits that he wasn't happy at what he viewed as an imbalance among divisions when he took the job. "It's much more balanced than when I came in," said Williams.

One often-heard complaint is that Williams tries to control the whole process, and that he has been able to do this only by reigning in the powerful and popular enforcement chief, Stanley Sporkin. It is pointed out that enforcement attorneys before could take their memorandums seeking investigative authority directly to the commission. But under Williams, they often must clear some of their memos with the general counsel's office. To some of them, this is tantamount to censorship, giving the Williams-appointed general counsel veto power.

Williams sees the process as simply good management. "I have a responsibility, both from a management viewpoint and from the viewpoint of the commission agenda to structure some of these things," he says.

The apparent winner in the Williams' rebalancing of the SEC is the division of corporation finance, which oversees the filing disclosure forms by companies. Until recently, that division worked very closely with enforcement, often referring questionable corporate filing for possible legal action. But now Williams has put a new team at the top of that division and the close ties to enforcement reportedly have been severed.

The Williams-appointed director of Corporation Finance, Edward F. Greene, is a former securities attorney in the New York firm of Willkie, Farr and Gallagher. Green is reportedly high on Williams' list to replace Pollack.

Greene's former law partner, Kenneth Bialkin, was an arch-critic of the enforcement division during the five years he was chairman of the securities committee of the American Bar Association. Now, says Bialkin, "The SEC's showing quite a bit of responsibility lately."

Williams, it is alleged, shows little interest in pursuing new areas of mounting fraud here," says one former SEC attorney. "People running tax shelters are like poachers in a game preserve where the game warden has been told not to bother them. But Williams feels that investors in tax shelters are wealthy enough and smart enough to take care of themselves."

Williams says shelter frauds are the responsibility of the Internal Revenue Service. "The IRS could blow them out of the water," he argues. "Our responsibility is to the police, the markets, and tax shelters are on the fringe of the markets."

The chairman has encouraged the enforcement division to bring a series of so-called insider trading cases, where officers or directors of companies enjoy profits on stock trading because of their special knowledge of companies' undisclosed plans. "Insider trading cases keep the market honest," he says. "I'd rather bring one insider trading case than 20 tax shelter cases."

In fairness to Williams, one area of markets fraud is beyond the grasp of the SEC's enforcement division -- to the frustration of some of its members. tFraud in the commodities markets is the responsibility of the Commodity Futures Trading Commission.

One potentially troublesome new development at the SEC under Williams' guidance is the policy of making it easier for small companies to raise money by selling securities. The commission did this, over the objection of the enforcement division, by allowing the small companies to file much simpler forms than their bigger corporate brothers. "I get the feeling that the SEC is shifting its efforts from ivestor protectiion to capital raising," said one congressional aide.

Another SEC observer believes that by making it easier small companies to sell stock, the SEC is laying the groundwork for future frauds. "The cumulative effect over the next five years will be an influx of frauds. And the effect of the headlines will be to further undermine the confidence of small investors," he said.

Williams has been hammered by critics for making tough speeches advocating corporate reforms such as more outside directors on corporate boards and stricter standards for accountants, and then later admitting that, in fact, the SEC had no say on such matters and that he prefers self-refulation by industry grops anyway. After Williams voiced those sentiments during a recent visit to London, The Economist magazine began a story critical of Williams this way: "Who says the SEC is made of marshmallow?"

Obviously burned by the article, Williams says he plans to shoot off a letter to the magazine.

Meanwhile, Williams refuses to comment on who he wants to fill the slot left by Pollack's retirement. And while he allows that he and Pollack often were on opposite sides of issues, Williams pays the ultimate compliment to the retired commissioner:

"He's a very talented person, and we're simply not going to find a replacement for him."