John S.R. Shad, a vice chairman of the investment firm E.F. Hutton, is the leading contender to become chairman of the Securities and Exchange Commission, several sources said yesterday.

If named, Shad would be the first SEC chairman in nearly two decades to come out of the brokerage business which the SEC regulates. Shad joined E.F. Hutton in 1962 and has been active in corporate finance with the New York firm.

Relatvely unknown in securities law circles, Shad was one of the leading fundraisers for President Reagan in New York State in the recent campaign and has been an active Republican supporter for the past 10 years, according to a coworker.

Shad, who could not be reached for comment, is said to have told the Reagan administration that he will take the job, despite a substantial tax liability that would go hand in hand with the nomination. To avoid conflicts of interest Shad would have to sell stock in E.F. Hutton and pay substantial capital gains taxes on the transaction.

"Most of Reagan's Cabinet are faced with the same problem," said William Clayton, an executive vice president of E.F. Hutton.

Shad "is extremely capable and hard-working," said Clayton. He'll be very fair in handling any problems that come before the SEC. The country will be fortunate to have his services, if that be the case," he said.

Carter's SEC Chairman Harold M. Williams has said he plans to retire March 1. If no appointment is announced by the time Williams retires, the Reagan administration could name one of the other commissioners as acting chairma.

Shad's name did not surface in initial speculation about who might succeed Williams. Most of the early guesses involved securities lawyers -- securities law being the occupation that has produced the greatest number of commissioners.

Shad has worked as a securities analyst, an account executive and an investment banker. At E.F. Hutton, where he is vice chairman of the E.F. Hutton Group, he has been active in the area of corporate finance and responsible for proxy statements and other areas that require a familiarity with the SEC, Clayton said.

Shad, 57, was born in Utah. He attended the University of Southern California, received a master of business administration degree from Harvard and a law degree from New York University Law School.

He has written about the financial realities of mergers, stock reacquisition programs, acquisition of U.S. firms by European companies and considerations involved in corporate decision to go public.

E.F. Hutton is one of the nation's largest investment companies, with approximately $684 million in sales in 1979. Word circulating around town that Shad was the candidate for chairman set off a round of jokes about E.F. Hutton speaking and people listening, playing on the refrain from the company's popular advertising campaign.

During Williams' tenure, the SEC was viewed as less active and aggressive than it had been before. Williams style is low-key.

Most SEC observers professed to know little about Shad or what aura he might bring to the regulatory agency if he is named.