I have the following function definition for a PostgreSQL 9.3.4 database:
CREATE OR REPLACE FUNCTION update_modified_timestamp() RETURNS TRIGGER AS $$ BE
You can change the statement separator so the statement is not split on a ;:
;
Go to: Session → Session Properties → SQL → Statement Separator
Even though you can't change it to an empty string, you can change it for example to //, which allows execution of the statement in the question.
//