A new approach to the generation of storm-associated ULF waves with discrete spectra (ion cyclotron harmonic waves) observed in the equatorial plasmasphere is presented. It is proposed that the appearance of waves with phase velocities smaller than the Alfv¿n velocity is connected with a strong dispersion of magnetosonic waves near the bi-ion frequency occurring in the presence of oxygen ions of ionospheric origin. The waves are generated by an instability involving hot oxygen ions with loss cone or ring like distributions. Such ions are found in the magnetosphere during magnetic storms. A simple analytical model of this instability is elaborated. It is shown that ULF wave observations on board Akebono satellite are in a reasonable agreement with the present theoretical approach.¿ 1997 American Geophysical Union